VAT News [January 2021]

The minister of finance announced VAT remission on the deliveries of COVID-19 vaccines and testing kits. Additionally, the minister issued a decision on the remission of interest on VAT arrears with regard to all taxpayers that cannot perform their business activities as a result of the government measures. Under what conditions? Find out more in the latest VAT news.

Minister’s decision on VAT remission

In December 2020, the minister of finance announced a remission of output VAT on the deliveries of COVID-19 vaccines and testing kits. This represents the implementation of an exemption with the right to deduct VAT, which is permitted by the EU VAT Directive.

 Additionally, the minister of finance issued a decision on the remission of interest on VAT arrears with regard to all taxpayers (under additional conditions) whose business activities were/will be prohibited or restricted in the period from 22 October 2020 to 31 March 2021 as a result of the resolution of the Government of the Czech Republic on the adoption of crisis measures, provided that the VAT due will be paid by 16 August 2021. Interest incurred in connection with the delay in VAT payments in the period between 1 January 2021 and 16 August 2021 is also remitted.

Information of the General Financial Directorate on the taxation of rents after 1 January 2021

In December, the General Financial Directorate issued information on the regime of taxation of rents for selected real estate properties in the period from 1 January 2021, i.e. after the amendment came into force, which significantly reduced the possibility to apply VAT. For this purpose, the Directorate defines living space with regard to what is registered in the land and property register. The public did not receive expected comments on the transitional provisions of the amendment; therefore, it remains unclear in which cases the new amendment affects contracts concluded before 2021.

GFD Indirect Taxes VAT dReport newsletter

The Intrastat reporting will change as of 1 January 2022

In line with the Government regulation on the implementation of certain provisions of the Customs Act in the area of statistics of 23 August 2021, the Intrastat reporting will change with effect from 1 January 2022. The new Government regulation has been prepared in cooperation with the Czech Statistical Office and will replace the existing legislation, i.e. Regulation no. 244/2016 Coll. The main reason for the replacement of the existing legislation is the extensive change of the directly applicable EU legislation in the area of statistics relating to the trading of goods between the Member States. 

22. 9. 2021

OECD update on a two-pillar solution

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (i.e., BEPS Action plan) has agreed on a two-pillar solution to address challenges arising from the digitalisation and globalisation of the economy. There are couple of changes in the current version plan, e.g., Pillar One shall be designed for all MNEs companies fulfilling specific turnover and profitability criteria (see below), while in the previous version of the plan Pillar One was mainly intended for technological giants. 

21. 9. 2021